Secretive Cazenove lifts the veil to reveal profit slump

Cazenove, the blue-blooded investment bank, conceded yesterday that its planned flotation next April might not go ahead if market conditions continue to be very tough.

Robert Pickering, the chief executive, dismissed much of the speculation about Cazenove's future, which includes the possibility it might sell itself, as "wine bar tittle-tattle".

But Mr Pickering added that Cazenove's board could still decide to postpone the float. He said: "The external environment has changed greatly since we said last April that we were working towards flotation. We cannot ignore that and the board will decide early next year."

Mr Pickering observed that the "market continued to be very tough" as the 180-year-old bank published its first ever annual results. Profits before tax and exceptional costs fell 33 per cent to £60m, while investment banking income was down 13 per cent to £256m in the 12 months to 30 April.

Mr Pickering said of Cazenove's decision to end its private partnership structure in November 2000: "I don't think any of us anticipated that we were heading into the worst downturn in investment banking since the 1970s."

Cazenove believes it is in a reasonably robust position because it is unlikely to have to try to raise money when it floats because it raised £200m in debt and equity when it incorporated the business.

The secretive bank hit the limelight recently because its deputy chairman, David Verey, resigned unexpectedly as a result of disagreements with Cazenove's management. Mr Pickering insisted the bank was able to recruit outsiders successfully to boost its skills.

One analyst said: "The fear is that Cazenove is run by a very small, close group and when they go, what is left? Another problem the bank has is that once the bank floats, what will stop senior employees cashing in their shares and exiting?"

Separately, Dresdner Bank embarked on a round of job cuts that included posts in the research department of its investment banking arm, Dresdner Kleinwort Wasserstein. The bank has said it would cut 3,000 staff by the end of the year.